Proceedings of the Standing Senate Committee on
Banking, Trade and
Commerce
Issue 23 - Minutes of Proceedings
OTTAWA, Monday, March 10, 1997
(44)
[English]
The Standing Senate Committee on Banking, Trade and Commerce met this day at 9:05 a.m. in room 505, Victoria Building, the Chairman, the Honourable Michael Kirby, presiding.
Members of the committee present: The Honourable Senators Angus, Buchanan, P.C., Comeau, Corbin, De Bané, P.C., Hébert, Hervieux-Payette, P.C., Kirby, Oliver, Pearson and Stewart. (11)
Other senators present: The Honourable Senators Cochrane, DeWare and St. Germain, P.C.
In attendance: From the Research Branch of the Library of Parliament, Mr. Gerald Goldstein, Director, Economics Division and Mr. Richard Domingue, Research Officer, Economics Division.
Also present: The official reporters of the Senate.
APPEARING:
The Honourable Paul Martin, P.C., M.P., Minister of Finance.
WITNESSES:
From the Department of Finance:
Mr. Don Drummond, Senior Assistant Deputy Minister, Tax Policy Branch;
Ms Ruth Dantzer, Director, Sales Tax Division, Tax Policy Branch; and
Mr. Andrew Marsland, Acting Chief, General Operations and Border Issues, Tax Policy Branch.
Pursuant to the Order of Reference adopted by the Senate on Thursday, February 20, 1997, the committee has before it Bill C-70, An Act to amend the Excise Tax Act, the Federal-Provincial Fiscal Arrangements Act, the Income Tax Act, the Debt Servicing and Reduction Account Act and related Acts. (See Issue No. 18, February 25, 1997 for full text of Order of Reference.)
The Minister made an opening statement and then answered questions.
Committee members then discussed subjects of possible amendment.
At 12:40 p.m. the committee adjourned to the call of the Chair.
ATTEST:
OTTAWA, Tuesday, March 11, 1997
(45)
[English]
The Standing Senate Committee on Banking, Trade and Commerce met this day at 11:10 a.m. in room 505, Victoria Building, the Chairman, the Honourable Michael Kirby, presiding.
Members of the committee present: The Honourable Senators Angus, Buchanan, P.C., Cochrane, Comeau, De Bané, P.C., Hervieux-Payette, P.C., Kirby, Kolber, Mercier, Milne, Oliver and Stewart. (12)
Other senators present: The Honourable Senators Hébert, St. Germain, P.C. and Simard.
In attendance: From the Research Branch of the Library of Parliament, Mr. Gerald Goldstein, Director, Economics Division and Mr. Richard Domingue, Research Officer, Economics Division.
Also present: The official reporters of the Senate.
Pursuant to the Order of Reference adopted by the Senate on Thursday, February 20, 1997, the committee considered Bill C-70, An Act to amend the Excise Tax Act, the Federal-Provincial Fiscal Arrangements Act, the Income Tax Act, the Debt Servicing and Reduction Account Act and related Acts. (See Issue No. 18, February 25, 1997 for full text of Order of Reference.)
The Honourable Senator Cochrane moved -- THAT Bill C-70 be amended, on page 365, by adding after line 40 the following:
"269.1(1) The portion of subsection 122.5(3) of the Act before paragraph (a) is replaced by the following:
(3) Where a return of income (other than a return of income filed under subsection 70(2), paragraph 104(23)(d) or 128(2)(e) or subsection 150(4)) is filed under this Part for a taxation year in respect of an eligible individual resident in a non-participating province as defined in subsection 123(1) of the Excise Tax Act and the individual applies therefor in writing, 1/4 of the amount, in any, by which the total of
(2) The Act is amended by adding the following after subsection 122.5(3):
(3.1) Where a return of income (other than a return of income filed under subsection 70(2), paragraph 104(23)(d) or 128(2)(e) or subsection 150(4)) is filed under this Part for a taxation year in respect of an eligible individual resident in a participating province as defined in subsection 123(1) of the Excise Tax Act and the individual applies therefor in writing, 1/4 of the amount, in any, by which the total of
(a) $407,
(b) $407 for a person who is the qualified relation of the individual for the year,
(c) $407, where the individual has no qualified relation for the year and is entitled to deduct an amount for the year under subsection 118(1) by reason of paragraph (b) thereof in respect of a qualified dependant of the individual for the year,
(d) the product obtained when $214 is multiplied by the number of qualified dependants of the individual for the year, other than a qualified dependant in respect of whom an amount is included by reason of paragraph (c) in computing an amount deemed to be paid under this subsection for the year, and
(e) where the individual has no qualified relation for the year, the lesser of
(i) $214, and
(ii) 4.3% of the amount, if any, by which
(A)the individual's income for the year
exceeds
(B) the amount determined for the year for the purposes of paragraph 118(1)(c),
exceeds
(f) 5% of the amount, if any, by which
(i) the individual's adjusted income for the year
exceeds
(ii) $25,921,
shall be deemed to be an amount paid by the individual on account of the individual's tax payable under this Part for the year during each of the months specified for that year under subsection (4).".
The question being put on the motion, it was defeated 6 votes to 5.
The Honourable Senator Cochrane then proposed a resolution -- THAT the committe notes that, since the inception of the GST, the federal government has made GST rebate payments to compensate the working poor, people on social assistance, senior citizens, students, and low income people for the added tax burden imposed on them by the GST.
In the case of the HST to take effect in Newfoundland and Labrador, Nova Scotia and New Brunswick, no such mechanism exists in either the federal or provincial legislation to relieve the burden on lower income people.
Be it therefore resolved that the committee recommends that the Senate urge the provincial governments in provinces where the HST will take effect to provide relief to low income people through rebates, tax credits, or deductions to offset the provincial portion of the HST.
The question being put on the motion, it was agreed to unanimously.
It was moved by the Honourable Senator Oliver -- THAT clause 69 be amended,
(a) on page 91, by deleting lines 42 to 46;
(b) on page 92, by deleting lines 1 to 4; and
(c) by renumbering subclauses (2) to (12) as subclauses (1) to (11), and any cross-references thereto accordingly;
THAT the Bill be amended, on pages 95 to 98, by deleting clause 69.1; and
THAT clause 149.1 be amended, on page 164, by replacing line 8 with the following:
"149.1 Schedule VI to the Act is amended by adding the following after Part X:
Part XI
READING MATERIAL
1. A supply of any book, periodical literature or other reading material, but not including anything that is or the main component of which is
(a) a magazine or periodical acquired otherwise than by way of subscription;
(b) a magazine or periodical in which the printed space devoted to advertising is more than 5 per cent of the total printed space;
(c) a brochure or pamphlet;
(d) a sales catalogue, a price list or advertising material;
(e) a warranty booklet or an owner's manual;
(f) a book designed primarily for writing on;
(g) a colouring book or a book designed primarily for drawing on or affixing thereto, or inserting therein, items such as clippings, pictures, coins, stamps or stickers;
(h) a cut-out book or a press-out book;
(i) a program relating to an event or performance;
(j) an agenda, calendar, syllabus or timetable;
(k) a directory, an assemblage of charts or an assemblage of street or road maps, but not including,
(i) a guidebook, or
(ii) an atlas that consists in whole or in part of maps other than street or road maps;
(l) a rate book;
(m) an assemblage of blueprints, patterns or stencils;
(n) prescribed property; or
(o) an assemblage or collection of, or any item similar to, items included in any of paragraphs (a) to (n).
149.2(1) Section 4 of Schedule VII to the".
The question being put on the motion, the proposed amendments were defeated 6 votes to 5.
The Honourable Senator Buchanan moved -- THAT clause 93.1 be amended, on page 131, by replacing line 29 with the following:
"93.1 Section 5 of Part II of Schedule V to the Act is replaced by the following:
5. A supply (other than a zero-rated supply) made by a medical practitioner of a consultative, diagnostic, treatment or health care service rendered to an individual (other than a surgical or dental service that is performed for cosmetic purposes and not for medical or reconstructive purposes).
93.2 (1) The portion of section 6 of Part II".
THAT the Bill be amended, on page 132, by adding the following after line 24:
"95.1 Section 9 of Part II of Schedule V to the Act is repealed.".
THAT clause 136 be amended, on page 156, by replacing lines 30 and 31 with the following:
"provision of Part II of Schedule V and a service related to".
and THAT the Bill be amended, on page 157, by adding after line 20 the following:
"136.1 Part II of Schedule VI to the Act is amended by adding the following after section 40:
41. A supply of any property or service but only if, and to the extent that, the consideration for the supply is payable or reimbursed by the government under a plan established under an Act of the legislature of the province to provide for health care services for all insured persons of the province.".
The question being put on the motion, the proposed amendments were defeated 6 votes to 5.
The Honourable Senator Angus moved -- THAT the Bill be amended,
(a) on pages 327 to 335, by deleting clause 242; and
(b) by renumbering clauses 243 to 273 as 242 to 272 respectively, and any cross-references thereto accordingly.
The question being put on the motion, it was defeated 6 votes to 5.
The Honourable Senator Angus then moved -- THAT the Bill, in Clause 242, be amended by replacing lines 40 to 45 on page 334 and lines 1 to 4 on page 335 with the following:
"(2) Subsection (1) comes into force on a day fixed by order of the Governor in Council, which day shall not be before the first day on which provinces together having at least 51% of the total population of all provinces that are participating provinces (within the meaning of subsection 123(1) of the Act) or that impose a general retail sales tax at a percentage rate on all goods (other than those specifically enumerated in the legislation that imposes the tax) or a general value added tax at a percentage rate on all goods and services (other than those specifically enumerated in the legislation that imposes the tax) have enacted laws requiring that suppliers include the tax under Part IX of the Act in indications of the prices of property or services supplied."
The question being put on the motion, it was agreed to unanimously.
The Honourable Senator Stewart then moved -- THAT Bill C-70 be adopted and reported with the one amendment and the one resolution.
The question being put on the motion, it was agreed to unanimously.
At 1:10 p.m. the committee adjourned to the call of the Chair.
ATTEST:
Paul Benoit
Clerk of the Committee